Monday, March 25, 2013

Coking Coal import drops during Apr-Feb period at Paradip port

Coking coal traffic at the Paradip port, one of the biggest coal handling port in the country, dropped 13.78 % in the April-February period to 4.52 million ton YoY basis. Coking coal traffic during the same period last year was 5.24 million tons. Since India completely depends upon import for its coking coal requirement, drop in port traffic directly implies to drop in coking coal import.

India's February coking coal imports drop almost 34% to 2.3 million tons in the month of February from 3.5 million tons in January 2013. Similarly the country's total coking coal imports remain flat at 25.97 million tons during the April-February period of the current financial year against the last financial year.

On the other hand, thermal coal traffic handled at the Paradip port in April-February period 2012-2013 increased by 28.84% to 19.12 million tons from 14.8 million tons in the same period in 2011-12. During this time  country's thermal coal traffic at various ports increased by 15.95 % to 53.06 million tons from 45.76 million tons YoY basis.

Although, Odisha is a significant thermal coal producer, power plants import low ash thermal coal from countries like Indonesia and Australia. India's thermal coal import is estimated to increase by 20% in the current financial year.

Reported by- Tapan Moharana

Friday, March 22, 2013

China coking coal contract draws 1st-day volume of 50.9 million tons

The Dalian Commodity Exchange's new coking coal futures contract attracted volume of approximately 50.9 million tonnes on March 22, the first day of trading for the contract at the Chinese exchange.

The DCE received approval earlier this month to launch the product offering, which it described as the world's first coking coal futures contract.

According to data from the DCE's website, 848,922 coking coal futures contracts traded March 22. Each contract represents 60 tonnes of coal, which equates to an overall volume of 50.94 million tonnes. Open interest after the first day of trading stood at 97,386 contracts.

The September contract, which had by far the most volume of any delivery period, settled at a price of 1,276 yuan ($205.17) per tonne, according to the DCE.

Coal specifications for the new futures contract include washed coking coal with volatile matter of 16% to 28% on a dry ash-free basis; ash content of 10% to 11.5%; sulfur content of 1.1% to 1.4%; less than 8% total moisture; and greater than 50% coke strength after reaction.

The minimum delivery volume for the contract is 6,000 tonnes.

As of March 21, US$1 was equal to 6.219 Chinese yuan.

Indian 63.5/63 iron ore fines stable at $134-135/t CFR

Indonesia's coal exports are expected to rise to 330 million tons in 2013, up 6.5 % from a year ago, chairman of the Indonesia Coal Mining Association said.

Indonesia which is world's top exporter of thermal coal largely uses coal to fuel power stations in China and India. Its mineral sector including coal is worth $93 billion and contributes 12 % to the country's gross domestic product.

"Exports remained high due to domestic consumption remaining small," said Bob Kamandanu adding that demand from key consumer China, especially for low-quality coal, was quite strong.

"India always needs coal and (exports to India) will continue to increase" he further added.

Kamandanu said the government had lifted a ban on exports of low-grade coal as the coal industry has suffered from low prices during the slowdown of the global economy.

Also he said that he did not expect the government to re-instate the export ban for at least the next two to three years.

Indonesian coal miners have been affected broadly by recent low coal prices that have forced many higher cost operations out of the market. The benchmark Newcastle spot index has recovered slightly this year after dropping by a third last year to lows of around $80 a ton.

Kamandanu also expected the forecast of Indonesia's coal output to 400 million tons this year, up from a prior forecast of 370-375 million tons.

The rise in the forecast came despite some weather-related output problems at the beginning of the year.

Indian 63.5/63 iron ore fines stable at $134-135/t CFR

Spot iron ore prices in Chinese market remained stable with slight improvement in domestic steel prices. Australian PB fines of Fe 61.5 is offered in the range of $134-135/t CFR China. Whereas, Australian Fe 62 fines sold at $134.8/t CFR China on Global Ore platform.

Indian Fe 63.5/63 iron ore fines also kept stable at $134-135/t CFR China, although, not many sellers were seen in the market. Sources say that big miners/exporters hold offers in the range of $138/t CFR for 63.5/63 fines.

Another Indian merchant exporter highlighted that there were quite a few deals concluded in the starting of this month. Although, it has come down with falling prices in Chinese market. Currently, Fe 56/55 is being offered in the range of $109/t CFR.

He also mentioned that a cargo of 20,000 tons of Mill Scale was concluded at around $135/t CFR last week from Indian east coast.

Wednesday, March 20, 2013

Coking Coal Market under Pressure

Spot Coking Coal market remains under pressure 

Spot Coking Coal prices (Asian market) continued to remain under pressure due to high inventories in China, low buying interest and unchanged offers.

Currently, Premium Low volume grade is available at $159/MT (FOB Australia) compared to $173/MT (FOB) in February. On the other hand HCC 64 Mid Volume is at $145/MT (FOB). Panamax freight cost from Australia to Indian ports is $17/MT.

Further price drop is anticipated, hence end users are procuring lesser amount (20,000-30,000MT) of coal despite of buying a complete panamax or capesize vessel, said a trading source.